Business travel begins a strong climb back into relevancy in
2010 after the decimation of the global banking and pursuant economic crisis of
2007 and 2008 begins to recede into the distance. Business travel demand returns
to the airlines by the third quarter and the travel industry sees both airfares
and hotel rates rise on stronger load factors and occupancy that would prove
durable through 2011.
What’s clear in the pages of BTN by 2010 is the emergence of
modern business travel as we know it.
While it is arguable that business travel is on the cusp of
another revolution today—thanks to technology advancement and particularly
artificial intelligence—the drivers of modern business travel concerns are falling
into place by the end of the millennium’s first decade. And these concerns of would
remain solidly in place at least until the Covid-19 pandemic in 2020 would screech
the industry to a halt, after which the concept of AI and true personalization and
loyalty truly begin to take hold.
But that’s the future. Let’s look at the pillars emerging in
2010 that changed the industry:
Distribution Dialogue Takes Hold
By July 2010, a group of six airlines—Air Canada, American
Airlines, Continental Airlines, Delta Air Lines, United Airlines and US Airways—along
with fare filing entity ATPCo form an industry working and advocacy group
called Open Axis. Within a week, the airlines are joined by a spate of “allied”
members: AOI Marketing, reservations software provider Datalex, payment
processing firm eNett International, middleware provider LUTE Technologies AG,
mobile app developer Mobiata, travel IT consultancy PASS Consulting Group and
airline reservations provider Radixx International. All of these providers had
skin in the game to create a new distribution ecosystem that, as the group
stated in a November positioning paper, would “ensure all parties have detailed
and timely data regarding ancillary services without dependency on full-scale
ARC/IATA production rollouts.” Basically, a ‘new distribution system.’
Open Axis would be active at least through 2011, advocating
for new distribution schema that would dispense with the GDS standard EDIFACT
and move toward an XML standard as put forth by Farelogix. Open Axis joined
forces early on with an older industry group OpenTravel Alliance to ensure
their efforts were aligned. Capital-letter New Distribution Capability as
defined and rolled out by IATA (around which industry dialog would be very much
driven by then-ARC CEO Michael Premo) wouldn’t emerge until 2012, also pushing
for an XML standard. At which point the efforts for the XML standard were
largely shifted to that international airline body.
No global distribution systems or travel management
companies were involved in OpenAxis. Noting Sabre’s own work in pursuing
standards to support ancillary air services distribution, Sabre vice president
of marketing at the time optimistically said, “we think it’s great news that
the airlines, along with ATPCo, have been working on this too, and frankly we
think it is possible that we could converge to a single standard without too
much difficulty.”
A grimly hilarious opinion in retrospect.
On another front pushing toward better merchandizing, AA
began a big distribution battle in November 2010, which would prove to be a
precursor of many of that airline’s future efforts to move the needle for
better control over its retailing destiny. Earlier in the year, the airline had
rolled out a direct-connect option under which partners would be able to access
what it called the “Your Choice Suite”—the airline’s collection of ancillary
services that it would only offer through the direct connect. Major agencies
and GDSs rejected the option, but in November AA removed its content from Orbitz
under the auspices of the booking site not adopting the direct connect that would
power AA’s merchandizing strategy.
The move would cascade into a number of lawsuits—including
antitrust suits against Travelport and Sabre—court issued stays, appeals and
ultimately reinstating content, but it would take until 2013 for all
those to resolve. AA would again pull its content from Orbitz consumer
sites in 2014, but it did not impact Orbitz for Business customers. We’ll look
more at the 2011 machinations in next week’s timeline.
Mobile Technology
While distribution sagas were playing out, mobile travel
technology was revving up. BTN ran a series of articles penned by Michael B.
Baker, Jay Boehmer and David Meyer under the umbrella title: Killer Apps &
Mobile Menaces, reviewing some of the pros and cons of adopting mobile apps—particularly
those from travel suppliers—and how they could both support travelers while on
the road but also pull decision-making out of the managed travel program.
Hotels in 2011 had already rolled out apps that enabled room
service ordering and delivery, the ability to make spa appointments and at
least one—Omni—was piloting technology to allow users to check in remotely. IHG
at the time was testing mobile keys.
Ground transportation apps like Taxi Magic integrated taxi
dispatch services. This was pre-Uber. Some buyers advocated for airport
way-finding apps that would guide travelers to healthy eateries. Of course, mobile
navigation from Google Maps and Waze were pretty well established by 2010.
For the most part, the industry was just coming to terms
with mobile. There was broad agreement, however, that while most apps were
providing access only to information, the industry would see widespread mobile
booking and mobile travel assistants in the near future.
Concur had launched limited mobile booking and expense in
2009. But itinerary managers like TripCase and WorldMate were gaining ground
among business travelers, so much so that CWT would contract with WorldMate in
2010. It would acquire WorldMate in 2012 (it was discontinued in 2017 as
players like Google integrated travel reminders in their own mobile platforms).
The race for mobile booking technology across Concur and TMC mobile apps would
continue for a few more years, particularly as it concerned air bookings.
One app called ConTGo headed by former Sabre sales exec
Johnny Thorsen presented a two-way mobile messaging platform for business
travel reminders and push-alert policy information and was gaining traction in
2010. CWT rolled it out to customers as did American Express through its first
mobile app MobileXtend.
Risk Management
ConTgo would go on to get a big shot in the arm with mobile risk
management messaging and traveler location tracking due to a major push towards
duty of care and risk management procedures in 2010. That was thanks to the
eruption of Icelandic volcano Eyjafjallajökull
that began on March 20, 2010, after 187 years of quiet. On April 14, it began
emitting plumes of ash that would disrupt airspace over western and northern
Europe for the better part of a week, leaving travelers stranded. It would
continue to disrupt pockets of flights for at least three more weeks. The
magnitude of stranded travelers—and their respective companies’ ability to
provide duty of care—highlighted the possibilities for mobile communications to
bridge a critical gap.
ConTgo wasn’t the
only beneficiary of the new focus. Duty of care providers like iJet and International
SOS plus an abundance of mobile traveler tracker apps gained momentum. Companies
that had not put in duty of care and risk management policies and procedures after
9/11 rushed to do so.
Data Privacy
Finally, data privacy, which had reared its head in acute
circumstances in previous years—remember the agency backlash in 2003 against PRISM’s
corporate benchmarking scheme?—began its entrance into common parlance in the
business travel industry. Traveler tracking technologies posed one vector of
concern. But a larger one—and one that would persist as an ongoing contrast
between data privacy regulation in the U.S. versus that in Europe—was predicated
on the U.S. approach to airline security and immigration policy, and was
beginning to lose acceptance with EU regulators.
An EU watchdog reviewing proposed standards under which
European countries would be required to transmit all PNR details of all
travelers entering the United States from the EU was deeply criticized, citing the
overreach of subjecting “innocent people” to such deep risk assessment that it
raised “serious proportionality issues.” The opinion also argued that just
because government agencies can now analyze PNR data does not mean they should
be allowed to do so. “The fact that recent technological developments
currently render wide access and analysis possible … is not in itself a
justification for the development of a system aimed at the screening of all
travelers,” it said. “In other words: the availability of means
should not justify the end.”
With additional advances—especially with the advances in artificial
intelligence we see today—those are big questions we will continue to deal with
in travel management and in society at large.
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[Editor’s Note: There were no January or December BTN issues in 2010.]
February
Boeing Travel Management becomes an ARC-accredited Corporate Travel Department and wants to phase out services
for external clients, with 80 percent of its business coming from its parent
company Boeing and its subsidiaries.
Travel buyers succeed in reducing global hotel rates and upping inclusive amenities for 2010. This
year, many buyers choose dynamically priced base rates or tiers of rates within
a certain property.
Antitrust-immune joint ventures like 2008’s U.S.-EU Open
Skies have become critical to U.S. carriers’ international growth. It would
allow airlines to expand their networks and share resources, amid legal and
economic barriers to traditional mergers and market entry.
March
Transatlantic joint ventures reshape business travel
procurement. Government approvals for antitrust immunity are turning almost a
dozen individual transatlantic competitors into three dominant entities. This
would offer broader networks and improved pricing, but also reduced negotiating
power and options for buyers.
Corporate travelers gradually return to premium cabins for long-haul flights after a big decline in
2009. However, passenger volumes and yields are still below pre-crisis levels,
with airlines expecting a slow recovery.
American Express Global Travel Services president
Charles Petruccelli sees travel volumes rising and eventually plateauing in 2010.
This would be driven by pent-up demand rather than a full recovery. Meetings
spending and the small and midmarket segments are potential areas of growth.
Ritz-Carlton Hotel Co. president and COO Simon Cooper
speaks with BTN about corporate travel’s role in the luxury tier and updates
within its parent company Marriott International. He predicts a steady return of business and group travel.
Business Travel News is acquired by Northstar Travel Media. The deal also
includes MeetingNews, Successful Meetings, Incentive and the MiMegasite online
meetings industry portal.
CyberShift and Concur have created alliances with online booking suppliers NuTravel andAmadeus, respectively, to integrate technologies like travel booking,
expense reporting, and employee reimbursement.
April
Travel buyers continue to struggle with tracking and managing baggage and other a la carte fees. So
far, they’ve only heard promises of future solutions and have relied on their
own makeshift workarounds.
As U.S. carriers approach peak summer travel season, they
keep tight control over domestic seat supply. Large airlines focus on capacity
discipline and avoiding significant growth, while new entrants and low-cost
carriers are also limiting expansion.
A new provision in the U.S.-EU Open Skies deal will lift
some government contractors from the Fly America Act
restrictions, which would let EU airlines compete for transatlantic business
with U.S. contractors. But the impact may be limited by current transatlantic
joint ventures and a loophole that already lets contractors fly foreign carriers
under codeshares with U.S. partners.
Concur and TRX have adapted their travel
management tools for the Google Apps Marketplace. Concur recently launched its cloud-based expense management
tool, Concur Breeze for small businesses in the U.S., and targets global
expansion by year-end.
U.S. corporate car rental rates remain stable. Yet buyers
may soon deal with more challenging negotiations and the presence of no-show fees, as rental companies like Avis Budget Group start testing penalties for canceled bookings.
May
Buyers have mixed views on the impact of the planned United-Continental
merger on their travel programs, but a majority that was surveyed support U.S. regulatory approval. Their concerns
include higher fares, less competition, and service degradation, while others
recognize benefits like a broader network and improved corporate deals.
Avis Budget Group seeks to outbidHertz for Dollar Thrifty Automotive Group.
In a letter to Dollar Thrifty’s chairman and CEO Scott Thompson, Avis Budget’s
Ronald Nelson said his company intends to bid significantly more than Hertz’s
$41 per share offer.
Cory Garner, American Airlines director of
merchandising strategy, shares an overview on AA’s direct-connect strategy for selling ancillary services, its
dissatisfaction with its global distribution deals and its plan not to charge
users for content.
Travelport’s Gordon Wilson discusses the company’s
upcoming Universal Desktop launch, as well as its Traversa booking
tool for large corporations, new booking tool partnerships, and goals to revive
its abandoned stock market flotation.
Control, cost savings, and transparency have motivated
companies like Moog, WellPoint, and Wal-Mart to become
ARC-designated Corporate Travel Departments. These factors remain
compelling as more businesses explore this option for managing travel.
June
Some European travel managers reject Lufthansa‘s new
corporate contracts that withhold rebates for missed targets. The contracts also require
refunds of upfront discounts, include potentially sensitive data on marketing
tapes the carrier gets from GDS, and lack last-seat availability for negotiated
fares.
Despite efforts from buyers and hoteliers, hotel rate accuracy in global distribution systems hasn’t
improved much. Another issue, the drop in those negotiated rates, has become
more problematic in a buyer’s hotel market.
Fly540, a low-cost airline operating in East Africa,
joins other carriers in embracing GDS distribution. Thanks to lowered distribution costs, it
is offering its fares via corporate channels for the first time and hopes to
attract higher-yielding passengers.
Chris Crowley, the Association of Corporate Travel
Executives’ first European president in 20 years, talks about the
challenges in the industry and his plans for ACTE. He also acknowledges the
volcano eruptions in Iceland ongoing at the time.
Carlson Wagonlit Travel estimates that the energy
sector spends $4.3 billion a year on air travel, prompting the company to
create its Global Energy Services Group. It is CWT’s first global division dedicated to the travel needs of one
industry segment.
American Express Business Travel introduces a mobile travel solution based on proprietary and third-party
technology that would enable travelers to manage itineraries and bookings
through mobile devices, regardless of channel used.
A recent BTN survey reveals that despite the popularity of wireless
Internet access on U.S. flights, most companies do not reimburse travelers who
log on in the air.
July
American Airlines‘ new “Boarding and Flexibility Package,” its first a la
carte offering available only via direct channels at booking, excludes
corporate travelers unless their agencies adopt the controversial American
Airlines Direct Connect.
Air Canada, American Airlines, Continental Airlines,
Delta Air Lines, United Airlines, and US Airways form Open Axis—an industry group to promote airline distribution
technology that will support sales of unbundled ancillary services.
JetBlue Airways has quickly grown its presence at Boston Logan International Airport. It now offers more
service than its competitors and has positioned itself as a primary domestic
carrier for some companies, especially in the corporate travel sector.
Hotel executives from Best Western, Marriott,
and InterContinental consider how the recent Gulf Coast oil spill might affect the industry,
particularly coastal properties.
Global distribution companies make great strides in
next-generation agent desktops. Sabre, Amadeus, and Travelport introduce new platforms that would improve functionality and replace outdated
interfaces.
August
Major domestic airlines and global distribution system
providers disagree on whether full content agreements include ancillary services. This
creates issues for offering a la carte airline services through corporate and
agency channels.
BCD Travel appoints Mike Janssen as its president of the Americas, replacing
industry veteran Danny Hood.
Many airlines warn travel agents that failure to properly
submit data for the U.S. Transportation Security Administration’s Secure Flight program could result in canceled passenger
name records or agency debits.
Delta Air Lines’ upward revision of its capacity
plans for the second quarter upsets investors. Worries subsided as other
carriers maintained modest growth, with the airline industry overall expected
to grow full-year capacity by 1.1 percent in 2010.
September
Kevin Austin, TRX‘s executive vice president, becomes
the largest stockholder on the management team. He took control
of 15.2 percent of the company, after reinvesting capital from the acquisition
of his previous company, Hi-Mark Software.
Southwest Airlines CEO Gary Kelly says the carrier
could capitalize on opportunities from industry mergers, like the proposed United and Continental deal. Southwest recently announced a lease agreement with Continental for slots and facilities
at Newark for 18 daily roundtrip flights.
Carey International tests a lower-cost version of its
chauffeured transportation service with its Embarque subsidiary, offering chauffeur-driven Ford Fusion
and Toyota Camry cars at 30 percent lower prices. After quietly being set up in
Chicago and Newark in 2009, Embarque plans to expand to 10 more cities,
including New York, Los Angeles, and London.
Sabre Travel Network and Cisco are working
together to develop a vendor-agnostic distribution system for booking
telepresence suites. Through it, users would be able to compare rates and
availability across multiple providers.
Hewlett-Packard has consolidated its travel
operations into two global call centers, implemented advanced travel
automation, and unified various payment systems. These efforts have lowered
travel spending by 40 percent and staff and program costs by 50 percent, while
maintaining customer satisfaction levels at over 92 percent.
October
After cutting capacity in 2009 for the first time in its
history, Southwest proposes the $1.4 billion acquisition AirTran Holdings that would
bring it entry to Atlanta and international markets and reignite growth.
Following Dollar Thrifty Automotive Group shareholders’
Sept. 30 rejection of Hertz’s acquisition offer, Avis Budget Group pushes ahead in is efforts to buy DTAG as
Hertz turns its attention to its low-cost Advantage Rent-a-Car brand. Sabre
Rolls Out Total Air Pricing Worldwide
A brief proposal on GDS fee transparency, part of a
Department of Transportation drive to bolster air traveler protections, weighs
in at just a few sentences and no more than 200 words, yet has elicits hundreds
of public comments in the docket. Airlines oppose what they see as interference
in their commercial relationships. Travel buyers, business travel groups
support the move.
The U.S. DOT is expected to finalize the tentative approval of two antitrust-immune joint ventures competing
between Japan and the United States: American Airlines and its Oneworld
partner Japan Airlines, for one, and Star Alliance members All Nippon and the
recently merged United Airlines and Continental Airlines as the other. The move
advances the tentative Open Skies agreement, but it does not lift Japan’s
restrictions on point-of-sale discounts in the country, leaving it as one of
the few markets in the developed world in which carriers are required to
structure deals almost solely through back-end rebates.
American Express fights a U.S. Department of Justice antitrust
lawsuit filed early this month that claims the card company, along with
rivals Visa and MasterCard, prohibits merchants from offering incentives to use
cheaper forms of payment. Visa and MasterCard agreed to a settlement that
allowed merchants to steer buyers to less expensive forms of payment. The case
ultimately goes to the Supreme Court, which rules in favor of Amex in 2018.
November
U.S. corporate card issuers Bank of America Merrill Lynch,
Citibank, JPMorgan Chase and U.S. Bank increase their global scope based on
demand from travel buyers to support global travel and entertainment needs from
a single payment platform.
Carriers report double-digit percentage increases in
corporate-specific revenue for 2010 third quarter versus a year earlier.
Delta Air Lines claimed 35 percent growth and US Airways claiming 23 percent
growth. Both carriers noted that corporate revenue is growing at a much faster
rate than overall passenger revenue.
Open Axis advocates for XML—not EDIFACT—as the primary language
of indirect distribution and for expanded electronic miscellaneous document
transaction reporting “to ensure all parties have detailed and timely data
regarding ancillary services without dependency on full-scale ARC/IATA
production rollouts.”
European
Data Protection Supervisor Peter Hustinx found indiscriminate transfer of
PNRs to government agencies incompatible with EU principles on data protection.
It read: “The EDPS considers that the bulk transfer of data about innocent
people for risk assessment purposes raises serious proportionality issues.
A Cook County, Ill., circuit judge on Nov. 20 approved a temporary
restraining order preventing American Airlines from terminating deals with
Orbitz Worldwide on Dec. 1. The ruling, however, only temporarily delayed AA’s
move, which served as the beginning of a battle that extended into 2011, saw AA
pull content from Orbitz and would not be fully settled until 2013.
Public furor over the U.S. Transportation Security
Administration’s expanded full-body
scans and enhanced pat-downs for individual who decline to use new scanner
technologies at airport security left travel managers about balancing traveler
security and comfort and led some to consider duty-of-care policies to address
traveler concerns.
Hotel projects under construction in the United
States falls to the
lowest level that Lodging Econometrics has ever recorded, with hotel
companies looking to the Middle East, China and India for growth.
Timeline produced this week by AI and BTN editorial content and engagement manager Gianna Song
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Elizabeth West is the editorial director of the
BTN Group. She has reported on the business travel and meetings industries for
24 years. Beth was editor-in-chief of Meeting News from 2006 to 2008 and
director of content solutions for ProMedia Travel from 2008 to 2011, when
ProMedia was acquired by Northstar Travel Media and merged with BTN. She became
editor-in-chief of BTN in 2015 and editorial director of the BTN Group in
2019.
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